Taxpayers losing big bucks to Clipper card program

Tens of thousands of people are cheating on the new smart card system some are using to pay for BART, Muni and Caltrain rides. It's because the Clipper card service lets them get out of the stations without paying the full fare and it's costing transit agencies and taxpayers more than half a million dollars.

As of now, if you buy a paper BART ticket, you can't get out of the station unless you have enough money on it to pay your full fare. That's not the case with Clipper cards. It's an expensive glitch that the MTC is getting ready to fix.

On his way to work, Charles Hayden makes extra money by recycling cans and bottles at BART stations. In the garbage, he also finds a lot of used Clipper cards and when he checks the balance, most of the time, it's negative. "I figured they're losing money," he told ABC7 News. In just the past two weeks, Hayden's collected dozens of cards with total negative balances in the hundreds of dollars. "I don't make a whole lot of money. I barely get by and if people are doing this, it's going to cost us money."

The Clipper program is administered by the Metropolitan Transportation Commission (MTC) which reimburses BART and other transit systems for the fares used by card holders. "The negative balance feature in the Clipper card is a deliberate customer service incentive that was built into the program to help the harried customer," explained MTC spokesman John Goodwin.

However, Goodwin acknowledges a significant number of users have learned to cheat the system. MTC estimates that as many as 10,000 cards per month "go negative" with an average negative balance of $2.50. That's about $25,000 in losses per month. About 60 percent of the abuse occurs on BART by those who pay for their Clipper card in cash. They get the card for free, load with as little as $5, and can ride until it's negative by as much as $10. Then, they often throw it away.

"Government is having problems. There's talk of cutbacks. They've cut back on BART. They're talking about raising fares and this needs to be fixed," BART rider Eugene Hyman says. The MTC does plan to roll out some big changes. In September, rather than giving them away to cash customers, there will be a $3 charge for the card itself. In 2013, the Clipper system will be integrated with BART's add-fare machines at BART stations so those with Clipper cards cannot leave with a negative balance.